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Amgen (AMGN) May Beat Q2 Earnings: Will the Stock Gain?
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Biotech major Amgen Inc. (AMGN - Free Report) will be reporting second quarter earnings results on Jul 27 after the market closes. Amgen had delivered a positive earnings surprise of 13.28% in the first quarter. Let’s see how things are shaping up for the company this quarter.
Factors at Play
Amgen’s growth products like Enbrel, Xgeva, Vectibix, Sensipar, Prolia and Nplate should continue performing well. While new patient adoption and repeat injections should drive Prolia, Xgeva should benefit from its superior clinical profile versus competition.
Vectibix continues to make solid inroads into earlier lines of therapy in the U.S. as well as Europe.
However, year-over-year comparisons for Enbrel are likely to be unfavorable given the significant inventory build in the second quarter of 2015. Enbrel is also facing increasing competition in the dermatology segment.
Kyprolis looks well-positioned to gain share with both the ASPIRE and ENDEAVOR data in its U.S. label. The product is also off to a strong start in its first markets in Europe.
Meanwhile, Epogen will continue to be impacted by further share declines at Fresenius Medical Care (FMS - Free Report) and the potential for additional switching to Aranesp. The second quarter will also see some inventory burn off to the tune of $30 million - $50 million reflecting the impact of large customer end user purchases for Xgeva and Neulasta in the first quarter.
The bottom line will continue to be driven by the company’s overall cost-cutting efforts and share buybacks. The company’s restructuring plan should make it leaner and more cost efficient.
Investor focus will remain on the performance of the company’s PCSK9 inhibitor, Repatha, its acceptance in the physician community, the formulary scenario for the product and tis performance in additional territories where it is being launched including Japan, Brazil and multiple countries in Europe. We expect Repatha sales to pick up once positive outcomes data is available and added to the label. The impact of the launch of Zarxio (biosimilar) on Neupogen sales will also be in focus.
Surprise History
Amgen’s track record is pretty impressive with the company beating earnings estimates consistently. The average earnings surprise over the last four quarters is 12.08%.
Our proven model shows that Amgen is likely to beat earnings because it has the right combination of two key ingredients.
Positive Zacks ESP: Earnings Surprise Prediction or Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +1.10%. This is a meaningful and leading indicator of a likely positive earnings surprise for the shares.
Zacks Rank #3 (Hold): Note that stocks with Zacks Ranks of #1, #2 and #3 have a significantly higher chance of beating earnings. The Sell-rated stocks (#4 and #5) should never be considered going into an earnings announcement.
The combination of Amgen’s Zacks Rank #3 and +1.10% ESP makes us very confident in looking for a positive earnings beat on Jul 27.
Stocks That Warrant a Look
Here are some biotech stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.
BioMarin Pharmaceutical Inc. (BMRN - Free Report) has an Earnings ESP of +4.00% and carries a Zacks Rank #3. It will be reporting results on Aug 4.
The Earnings ESP for Intercept Pharmaceuticals, Inc. is +7.45% and it carries a Zacks Rank #3. The company is expected to release results on Aug 3.
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Amgen (AMGN) May Beat Q2 Earnings: Will the Stock Gain?
Biotech major Amgen Inc. (AMGN - Free Report) will be reporting second quarter earnings results on Jul 27 after the market closes. Amgen had delivered a positive earnings surprise of 13.28% in the first quarter. Let’s see how things are shaping up for the company this quarter.
Factors at Play
Amgen’s growth products like Enbrel, Xgeva, Vectibix, Sensipar, Prolia and Nplate should continue performing well. While new patient adoption and repeat injections should drive Prolia, Xgeva should benefit from its superior clinical profile versus competition.
Vectibix continues to make solid inroads into earlier lines of therapy in the U.S. as well as Europe.
However, year-over-year comparisons for Enbrel are likely to be unfavorable given the significant inventory build in the second quarter of 2015. Enbrel is also facing increasing competition in the dermatology segment.
Kyprolis looks well-positioned to gain share with both the ASPIRE and ENDEAVOR data in its U.S. label. The product is also off to a strong start in its first markets in Europe.
Meanwhile, Epogen will continue to be impacted by further share declines at Fresenius Medical Care (FMS - Free Report) and the potential for additional switching to Aranesp. The second quarter will also see some inventory burn off to the tune of $30 million - $50 million reflecting the impact of large customer end user purchases for Xgeva and Neulasta in the first quarter.
The bottom line will continue to be driven by the company’s overall cost-cutting efforts and share buybacks. The company’s restructuring plan should make it leaner and more cost efficient.
Investor focus will remain on the performance of the company’s PCSK9 inhibitor, Repatha, its acceptance in the physician community, the formulary scenario for the product and tis performance in additional territories where it is being launched including Japan, Brazil and multiple countries in Europe. We expect Repatha sales to pick up once positive outcomes data is available and added to the label. The impact of the launch of Zarxio (biosimilar) on Neupogen sales will also be in focus.
Surprise History
Amgen’s track record is pretty impressive with the company beating earnings estimates consistently. The average earnings surprise over the last four quarters is 12.08%.
AMGEN INC Price and EPS Surprise
AMGEN INC Price and EPS Surprise | AMGEN INC Quote
What Our Model Indicates
Our proven model shows that Amgen is likely to beat earnings because it has the right combination of two key ingredients.
Positive Zacks ESP: Earnings Surprise Prediction or Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +1.10%. This is a meaningful and leading indicator of a likely positive earnings surprise for the shares.
Zacks Rank #3 (Hold): Note that stocks with Zacks Ranks of #1, #2 and #3 have a significantly higher chance of beating earnings. The Sell-rated stocks (#4 and #5) should never be considered going into an earnings announcement.
The combination of Amgen’s Zacks Rank #3 and +1.10% ESP makes us very confident in looking for a positive earnings beat on Jul 27.
Stocks That Warrant a Look
Here are some biotech stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.
BioMarin Pharmaceutical Inc. (BMRN - Free Report) has an Earnings ESP of +4.00% and carries a Zacks Rank #3. It will be reporting results on Aug 4.
The Earnings ESP for Intercept Pharmaceuticals, Inc. is +7.45% and it carries a Zacks Rank #3. The company is expected to release results on Aug 3.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>